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INTERNATIONAL EXECUTIVE MASTER OF BUSINESS ADMINISTRATION PROGRAM BUILDING BUSINESS STRATEGY FOR BA DINH CONSTRUCTION JOINT STOCK COMPANY i TABLE OF CONTENT Page TABLE OF CONTENT ii Page ii INTRODUCTION .iv Necessity for business strategy planning v Strategy in general and business strategy in particular play a crucial role for the success of enterprises Business strategies indicates competitive roads and forms in the market .v Ba Dinh company, after 11 years of development, has had certain successes However the company has yet analyzed analyzed and chosen a reasonable strategy which suitable for every kind of products and services Thus, it is essential to analyze deeper the business environment, then to develop and select an appropriate business strategy to ensure the long-term success of the company v In the framework of writing the thesis of International business management program provided by Thai Nguyen University co-operates with Paris Graduate School of Management, and to ensure the practise side of the theory which was presented in class, and with the experiences myself in managing Ba Dinh Construction Joint Stock Company, I have chosen: "Building business strategy for Ba Dinh Construction" as my thesis v Object, Scope, Time and Method of researching .v 2.1 Object .v The process of planning business strategy in a corporation v 2.2 Scope .v The research only deeply analysing, building and selecting business strategies in Construction and Erection works in Hanoi City – Vietnam by Ba Dinh Construction JSC v 2.3 Time v ii The research is based on figures provided by Ba Dinh Construction JSC from 2008 to 2012, and planning a business strategy for the company in the period of 2014 to 2018 v 2.4 Method v *Method: .v In this thesis, qualitative research methods were used, in detail: analysis, comparison, synthesis, analysis description (Descriptive Analysis) vi * Figures: vi Include primary and secondary data vi * Method of collecting data: vi Interview and questionnaire methods were used vi * Method of processing the data: vi Microsoft Excel and computer vi Contribution of the thesis vi - Systematizing the theoretical basic of business strategy and planning business strategy vi - Applying the theory of planning business strategy into practical analysis, as well as selecting business strategy for the future of Ba Dinh Construction Joint Stock Company At the same time launching an action plan (Action Plan) to implement the business strategy selected vi Structure of the thesis .vi LIST OF ACRONYMS .viii LIST OF FIGURES .ix LIST OF TABLE x CHAPTER 1: THEORETICAL BASIC OF BUSINESS STRATEGY AND STRATEGIC BUSINESS PLANNING OF FIRMS CHAPTER II: STRATEGIC ANALYSIS TO BUILD AND CHOOSE 33 BUSINESS STRATEGY 33 CHAPTER III: PLANS TO IMPLEMENT SELECTED STRATEGIES 67 iii INTRODUCTION In the process of building a market-oriented socialism economy in Vietnam today, Vietnamese enterprises have achieved certain successes in terms of integration, gained a lot of theoretical and practical experience when organizing their own business However, enterprises still face difficulties in new playground of extensive integration The evidence is that many enterprises develop unsustainably, producce inefficiently and go bankruptcy Practical lesson withdrawn from this fact is that most Vietnam enterprises lack of long-term perspectives and development strategies which are based on the science of human organization, corporate financial management, behavior organization, financial management, international business , and particularly strategy management In 11 years of development, Ba Dinh Joint Stock company is a small and medium sized enterprise, operating in the sector of construction of electricity grid, has created its position, gaining trusts of investors and gradually developed However, the unsustainable growth, the company lacks of long-term plans and strategic directions for long-term development I myself am the Director of Ba Dinh company, participating in academic training program desire to apply learned theories of management and put int, practical situation of Ba Dinh company in the current period so that the company can develop sustainably.Therefore, I selected the theme: " Strategic development Ba Dinh Construction Joint Stock Company" to be my thesis In the thesis, I have gathered , analyzed and synthesized most general theories about strategic management, about analysis of internal and external environment to figure out advantages and disadvantages, opportunities and challenges; creating a reasonable business strategy so that the company can have right vision and direction for sustainable development Thesis is done by using both theoretical and practical bases The purpose of this thesis is to solve out necessity of corporate building process: iv Necessity for business strategy planning Strategy in general and business strategy in particular play a crucial role for the success of enterprises Business strategies indicates competitive roads and forms in the market Ba Dinh company, after 11 years of development, has had certain successes However the company has yet analyzed analyzed and chosen a reasonable strategy which suitable for every kind of products and services Thus, it is essential to analyze deeper the business environment, then to develop and select an appropriate business strategy to ensure the long-term success of the company In the framework of writing the thesis of International business management program provided by Thai Nguyen University co-operates with Paris Graduate School of Management, and to ensure the practise side of the theory which was presented in class, and with the experiences myself in managing Ba Dinh Construction Joint Stock Company, I have chosen: "Building business strategy for Ba Dinh Construction" as my thesis Object, Scope, Time and Method of researching 2.1 Object The process of planning business strategy in a corporation 2.2 Scope The research only deeply analysing, building and selecting business strategies in Construction and Erection works in Hanoi City – Vietnam by Ba Dinh Construction JSC 2.3 Time The research is based on figures provided by Ba Dinh Construction JSC from 2008 to 2012, and planning a business strategy for the company in the period of 2014 to 2018 2.4 Method *Method: v In this thesis, qualitative research methods were used, in detail: analysis, comparison, synthesis, analysis description (Descriptive Analysis) * Figures: Include primary and secondary data * Method of collecting data: Interview and questionnaire methods were used * Method of processing the data: Microsoft Excel and computer Contribution of the thesis - Systematizing the theoretical basic of business strategy and planning business strategy - Applying the theory of planning business strategy into practical analysis, as well as selecting business strategy for the future of Ba Dinh Construction Joint Stock Company At the same time launching an action plan (Action Plan) to implement the business strategy selected Structure of the thesis Structure of the thesis included the followings: Besides the index, commitment, introduction of the thesis, acknowledgements, references and appendix, the thesis included Chapters: • Chapter 1: Theorical basic of business strategy and planning business strategy in corporation • Chapter 2: Analyzing, building and selecting strategy in Constrution and Erection sector of Ba Dinh Construction JSC • Chapter 3: Action plan to successfully implement the selected strategy vi vii LIST OF ACRONYMS Acronyms In full APEC Asia Pacific Economic Cooperation ASEAN Association of South East Asian Nations GDP Gross Domestic Product PEST Political, Economic, Social and Technological SWOT Strengths, Weaknesses, Opportunities and Threats WTO World Trade Organisation viii List of Figures Nguyen Anh Tuan – IeMBA.B03 LIST OF FIGURES Figure 1-1: Strategic management process Figure 1-2: External Environment .8 Figure 1-3: Industry analysis – Porter forces 12 Figure 1-4: Value Chain 18 Figure 1-5: SWOT Analysis 25 Figure 1-6: SWOT Matrix 27 ix List of Table Nguyen Anh Tuan – IeMBA.B03 LIST OF TABLE Table 1-1: An example of matrix analyzing external factor of an enterprise 16 Table 1-2: Example of matrix analyzing enterprise’s internal factors .22 x - Clarify human resource is the most important factor , one of the authorities in developing and increasing competitive advantage over other companies , the companies need to plan training and development strategy for human resources in sufficient volume and quality - Build management staff , skilled technical professional , technical and skilled workers, quality and productivity labor, increasing efficiency - A number of measures to recruit, train , staff use and management mechanism : o Structure of technical staff and management : lack of electrical engineer , civil engineers Having human resource management plans , care of planning, recruitment through links with a number of universities , colleges or select talent preset criteria ; o Planning , recruitment staff in local in order to reduce the difficulties of going away from home for the employees Logical layout , with rotation policy , fostering , training officers and employees o Some areas require the experts to apply advanced science and technology , should have specific plans to let the expert go abroad for training o Strengthening the construction of the projecting team , particularly the executive directors ,contracting authorities , supervising engineers , officials of the economic contract of the settlement ; o Develop specific standards for each title management , engineering and technical workers Organize recruitment and examinations base on standards 76 and regulations on recruitment , have efficient remuneration to attract good people , talented professionals to the company o Develop and implement the working environment, Ba Dinh Construction JSC culture in all activities of officers and employees : Healthy lifestyle, loyalty , hard working , sincerity , solidarity, helping each other fulfill all tasks assigned o Complete payroll policies , review the responsibilities coefficient of the HR system , the complexity of the assignment , the completion of an appropriate task Apply bonus material rules o Settlement of good compensation system, Social insurance , health insurance for employees o Strengthening and improving the system of rules and regulations on organization - personnel - labor production unit allocation , organization , powers, duties branch operations , production units , the working procedures of the agency; financial regulation - accounting , auditing , management and use of contracted equipment 3.2.4 The solution for ensuring full amount of raising capital and balancing optimal capital structure and business activities - Satisfying the capital requirement for the electrical installation businesses’ settlement is considerable How to optimum capital structure of the current conditions is a very important content , effect on business output of the company Thus, the company should implement the following specific measures: 77 - Primary capital source for business in the coming years should be accumulated equity Continue keep and strengthen traditional relationships with the banks which are offering credit Applying sufficient solution to the requirements for collateral and settlement of floating capital to maintain stable business Evaluating the mobilization of loans and the rise of equity in detail, using capital in a reasonable way to ensure proper usage of funds with the lowest expense, continually improve business efficiency - To accelerate the acceptance of payments, the company should carry out construction quality management , make the drastic technical acceptance , the amount paid up share prices , capital revenue by category work , the techniques used to minimize the amount of progress , reduce the backlog of capital works Strengthening the management and administration activities to increase efficiency , purifying finance area, making their own capital increase Follow the goal of reducing the number of days in the capital turnover and inventory : The settlement of the construction procedure for additional volume , arising adjustment, there are many shortcomings of the mechanism in the building at present Must claim the concerned authorities to promptly resolve construction , to avoid damage to the contractor - To increase the efficiency of business goals to create equity : o Improving regulation , financial institutions in general business management and production mode allocation , allotment storage devices Appropriate allocation of work between the functional parts , directly manufacturing parts 78 Operating functioning mechanism to examine and control business , reducing management costs , increase profits o Enhance asset management and equipment Promote efficiency and capacity of the construction equipment Preserving and maintaining good equipment to ensure depreciation value remaining high When the equipment will be fully depreciated, it help to sizable capital of the Company - Mobilization subcontractors , suppliers : o This is an important content of the current conditions and even in coming years Selecting subcontractors to increase capacity to complete the project and raise additional working capital from subcontractors , developing the capabilities and efficiency of the project management system, reduce project management cost The selection of sub- contractors perform should be consider for each project , specific areas ; o Need to maintain and promote the prestige and tradition of relations with suppliers , strengthen partnership links , create support base on the principle of "quality , credibility , mutual cooperation benefit " During the implementation process, the company needs to check, evaluate specific performance measures , detect the unreasonable solution , find out the cause for adjustment , improved to achieve the objective set out to promote capital sufficient , timely and appropriate capital structure to ensure the lowest cost of capital in order to bring high economic efficiency for business operations of the Company 79 3.3 A number of recommendations , limitations and directions for further research of the thesis 3.3.1 Recommendations - To help companies successfully implement the strategy , in order to maintain stable growth , ensure business efficiency , increase competitiveness , increase its market share in the field of electrical construction, the authors propose some following recommendations : - Innovating compensation policies to attract qualified staff on the specialized field to maintain and implement the strategy Training on-site and intensive training on the field of new technologies to enhance the quality of resources provided to the Company in the coming period - Develop strategic manager planning to meet the operating requirements of the business for market expansion - Application of scientific solutions in a synchronous manner , in order to have a competitive advantages to the competitors - Calculate loan and increased mobilization of capital , equity in a scientific manner to ensure optimal capital structure between debt and equity with the lowest cost of capital 3.3.2 Limitation of the thesis Thesis only focuses on research and development for the field business strategy in "construction lines and substations" with the specific situation of the Ba Dinh Construction Joint Stock Company Therefore, the conclusions drawn apply only for the construction and options for Ba Dinh construction JSC itself The conclusions drawn if applied to other companies require additional studies 80 3.3.3 Future research directions - The relationship between selected business strategy with functional strategies, competitive strategy in practice; - Adaptability and suitability of selected strategies in terms of how Vietnam joined the WTO completely 81 Reference Nguyen Anh Tuan – IeMBA.B03 CONCLUSION The thesis: "Building business strategy for Ba Dinh Joint Stock Company" focused on researching and developing the business strategy in order to put the business on practical use at the unit during its production On the basis of the learnt theories, to the knowledge collected during the learning process, and study the practical exchange among peers, especially the dedicated guidance of the teachers to guide and help me finish this thesis The findings of this thesis will hopefully help leaders Ba Dinh JSC have a clear vision, capture and maximize opportunities and limit the risks of competitive environment integration in the future, contributing to successful mission and target of the company 82 Reference Nguyen Anh Tuan – IeMBA.B03 REFERENCES [ ] Strategic Management - Strategic Management Textbook - Publisher Statistics 2007 [ ] Tuan Anh - Director of Investment Business Group Vietnam [ ] Abraham , 1999 : " The strategic options and choices - Center of strategic planning " - " Strategic Alternatives and Choice - The Heart of Strategic Planning " [ ] Capacity Profile Construction Corporation three families (2012 ) [ ] Report Ba Dinh JSC (2008-2012 ) [ ] General Statistics Office ( information on economic indicators - social site www.gso.gov.vn ) Vietnam Construction www.moc.gov.vn Vietnam Electricity Group www.evn.com.vn [ ] Vietnam News Agency 2012 [ ] Vietnam Electricity Group - Master Plan [ 10 ] The financial statements of the competitors [ 11 ] Report - human resource at Ba Dinh JSC (2012 ) [ 12 ] Blocher et al , 2002: " Analysis and Strategic cost management strategies " - " Strategic Analysis and Strategic Cost Management " [ 13 ] Raymond - Alain Thietart.1999 Business strategy ( translation ) [ 14 ] Griffin , 2005 : " Competitive Strategy " - " Competitive Strategy " [ 15 ] Hill and Jones , 1998: " Strategic Management - an integrated approach " - " Strategic Management : An Integrated Approach " [ 16 ] FredR.David , 2000 : " The concept of strategic management ( translation ) Publisher Statistics " [ 17 ] Development Plan National Power , Power Sector in Vietnam 2011-2020 , 2030 was driven by the Prime Minister approved on 21/7/2011 83 APPENDIX Appendix 1: Questionnaire (Sample 1) Dear Sir/ Madam, I am Nguyen Anh Tuan, graduate students from ieMBA.B03 classes, specialized in business administration at Paris Graduate School of Management associated with the Thai Nguyen University For reference purposes, I would like to have the experts’ opinion in the industry to implement my Master thesis subject: Building Business Strategy for Ba Dinh Construction JSC in period from 2014 – 2019”, I am please sending you this survey and hope you take some time to contribute ideas to the survey Your responses are very important to help me complete the dissertation This is a purpose of scientific research, not for trading purposes Sincere thanks to your help Please tick the appropriate box Please evaluate Ba Dinh JSC’s capabilities and the capabilities of the others in the sector, by the followings creteria: 1.1 Equipment capabilities - HẠ ĐÌNH JSC - An Thịnh JSC - Chí Linh JSC - Tân Hồng Mai JSC - Trường Sơn JSC 1.2 Market Share - HẠ ĐÌNH - An Thịnh - Chí Linh - Tân Hồng Mai - Trường Sơn Very good Very good xv Good Average Bad No Comment Good Average Bad No Comment 1.3 Price competition - HẠ ĐÌNH - An Thịnh - Chí Linh - Tân Hoàng Mai - Trường Sơn 1.4 Quality of works - HẠ ĐÌNH - An Thịnh - Chí Linh - Tân Hoàng Mai - Trường Sơn 1.5 Location - HẠ ĐÌNH - An Thịnh - Chí Linh - Tân Hoàng Mai - Trường Sơn 1.6 Financial capability - HẠ ĐÌNH - An Thịnh - Chí Linh - Tân Hồng Mai - Trường Sơn 1.7 Staff’s behaviour - Very good Very good Good Average Bad Good Average Bad Very good HẠ ĐÌNH xvi No Comment Good Average Bad Very good Very good No Comment No Comment Good Average Bad Good Average Bad No Comment No Comment - An Thịnh - Chí Linh - Tân Hồng Mai - Trường Sơn 1.8 Customers’ satisfaction - HẠ ĐÌNH - An Thịnh - Chí Linh - Tân Hoàng Mai - Trường Sơn Very good Good Average Bad No Comment In your opinion, in the coming years how likely are the appears of new competitors in the electrical construction industry will be? Very strong Strong Average Weak Domestic Competitors International competitors Sincerely thank to your contribution! xvii No Comment Apendix 2: List of experts and result of Questionnaire Make a list of experts and send cards directly to each person to get justice is by sample ( Sample ) Selection of Experts , concerning the assessment of the capacity of competitors through the bidding and selection of contractors include: - Mr Hoa Minh Phuc , Deputy Head of the plan Electricity Corporation Hanoi - View Duyen Nguyen , Head of Project Management grid Hanoi - Mr Hoang Van Anh , director of power company Dong him - Mr Nguyen Van Son , Director of the Electricity Company Gia Lam - Mr Vuong Duc Tue , director of power company Ba Dinh Summary of findings : Synthesis of the opinion of all the experts , we have common evaluation data on each company's Ba Dinh Construction Joint compared to direct competitors The dominant presence of Ba Dinh Construction Joint Stock Company are experts appreciate that : - Ability of marketing - Ability to compete on price - Satisfaction of customers Questions on the survey results and interviews : I Investigation period : From 15 to 30/8/2013 II Location survey : Hanoi III Applicants for the investigation : Mr Phan Thanh Lam - Deputy Head of Project Management Grid Power Corporation Hanoi Mr Nguyen Duc Gia - Head of Project Management East England Power Company Mr Nguyen Duc Thinh - Deputy Director Gia Lam Electric Company Mr Nguyen Van Sam - Director Chi Linh Corporation Mr Nguyen Thai Nhat - Director Tan Hoang Mai xviii IV Contents of investigation : In the future , environmental fierce competition in the presence of these companies in the electrical construction industry At the same time there will be the emergence of companies outside the industry , due to electrical construction market has great potential Therefore, the construction of a DN CLKD electrical installation is necessary In this context , he / she make any comments on the following issues : Identify the strengths and weaknesses of electrical construction and installation companies under their management on the following aspects : - Equity - Total Assets - Cultural Enterprise - Workforce - Gain competitive advantage - corporate reputation - Capital investment - management mechanism - Revenue - The construction and installation of electrical technology Selection strategy of their companies compete on the basis of pricing strategy , differentiation strategy and focus strategy , namely : a) In pursuit of cost leadership strategy than other businesses b ) Make a difference compared to other firms in the market on the basis of : - Product Package - Customer Service - Photos , reputable companies - Other factors ( if any) c ) Determine the strategy focuses on exploiting a market or a market segment given below : * Back to business : + All + Supply voltage High voltage generation + High + voltage level package works + Low-voltage power supply + diversification construction products * On the client + All customers xix +Investors power sector + The only business state that patrons + Customer + private enterprises Types other customers * In the area : + Range Hanoi + Inner city area + Suburban area + Other Areas On the basis of competitive strategy you choose , determine the priority of the following criteria : + Value Sales owner + Competitive Advantages + Capital gain + Corporate Culture Interviews : Most responses agreed that benefits the owner ( owner value ) is the highest point, followed by revenue , achieve competitive advantage and cultural capital business xx Appendix 3: Several companies’ information Tan Hoang Mai Joint Stock Address: 246 Hoang Mai , Hoang Mai District , Ha Noi City Phone : 84 (4) 8625185 Fax : 84 (4) 8625185 The company was granted the certificate of registration of business on March 1, 2004 Information on industrial companies Truong Son Joint Stock Address: No 44 , Lane 77 Bui Xuong Trach , Thanh Xuan , Ha Noi Phone : 84 (4) 38553279 Fax : 84 (4) 39632015 Business license number : 0103015923 by Planning Investment Hanoi February 28, 2007 About the Chi Linh Corporation Address: P5C1 , Jiang to21 medium , Thanh Xuan , Ha Noi Phone : 84 (4) 5121479 , Fax : 84 (4) 5537545 Founded September 19, 2005 About JSC An Thinh Construction Address: No 01N1 , 12 troopers Collective , Group 37 , Vinh Lake Street , Dong Da , Ha Noi Phone : 84 (4) 35121657 , Fax : 84 (4) 35121545 Established June 1, 2005 xxi ... enterprises, between enterprises with enterprises, between enterprises with economic sectors Through these measures and management practices, to regulate the impact scope, contents and methods of the... level of economic development: The level of economic development is the size, speed of economic development of a country, a region and economic level achieved The indicators of the level of economic... 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